'Black Thursday': Carnage at PSX as more than 2,100 points wiped off KSE-100 Index

KARACHI: The Pakistan Stock Exchange (PSX) saw carnage in a turbulent day of trading some are already dubbing 'Black Thursday', as a massive sell-off saw more than 2,100 points wiped off the benchmark KSE-100 index. 

The sell-off marked the largest single-day decline in a day's worth of trading at the PSX during the 2021 calendar year, and the third largest in history. 

The 100 index opened at 45,369 points to a relentless slaughter. Investors dumped their positions, wiping off 2,135 points — around 4.7% — by day's close.

Cements bore the brunt of the selling, with Lucky, Maple Leaf, DG Khan and Cherat Cement all closing at their lower circuit breaker. 

Tech, exploration and production and fertiliser scrips did not do any better, levelling heavy blows to the index. 

Volumes were up 60% from just a day earlier as investors panicked and rushed to get out of their positions. Of the 366 scrips traded in the day, 335 closed red. 

Speaking to Geo.tv, Alpha Beta Core CEO Khurram Schehzad said that investor sentiment had been badly dented after a record high import number.

"The import bill (trade deficit) was way beyond the market expectation, which shocked investors and they offloaded stocks," he said, explaining that a higher current account deficit increases the expectation of a policy rate hike and a subsequent rise in the cost of doing business.

However, the analyst added that the current account deficit is expected to contain in the coming months as oil prices in the international market have dropped significantly and the food and energy supply side is expected to improve in the ongoing six-month period, which will reduce the current account deficit.

Meanwhile, BMA's Capital Executive Director Saad Hashemy told Geo.tv that the investors took a negative cue from T-bill auctions.

"The figures, of the 3, 6 and 12-month T-bills [auctioned] were around 75-100 bps higher than in secondary markets, which led to the bloodbath," he said.

"Secondly, the higher-than-expected trade deficit added fuel to the negative sentiment," the analyst said, adding that investors weighed the chances of a massive interest rate hike during the upcoming State Bank Monetary Policy Committee meeting this month.

"Going forward, the market is expected to consolidate as valuations are attractive," he predicted.